Edmonton finished 2022 with a surplus of $81.5 million, according to the city's preliminary year-end financial results. That's about 2.5% of the city's roughly $3.2-billion tax-supported operating budget.
Administration said the surplus is primarily the result of lower-than-budgeted costs for financial strategies and personnel. The financial strategies budget, which is used to "manage risk and provide flexibility for unknown amounts," was $59 million lower than expected, mainly due to reduced fuel and utility costs. Personnel costs were $18.3 million lower than expected, mainly due to unfilled vacancies.
The surplus would have been even higher had it not been for an $18.2-million overspend on the snow and ice control budget. Administration said heavier snowfall and additional freezing rain led to $13 million in additional costs from January to April, and increased snow resulted in $5 million more from October to December. The overspend is on top of the $4.7 million in additional funding that city council approved on July 4 for enhancements to the snow and ice control program.
The surplus means the city's rainy-day fund, the Financial Stabilization Reserve (FSR), will be replenished past the minimum required balance of $122.8 million (the balance had fallen to $68.4 million following the 2023-2026 budget process). The FSR will now have a balance of $128.1 million, and administration recommends the $5.3 million over the minimum remain unallocated.
City council will review the preliminary figures, which are unaudited and subject to change, on March 14.
The city spent more than $18 million more than expected on snow and ice control in 2022. (Kurayba/Flickr)
Administration recommends carrying forward a number of previously approved items that did were not completed in 2022. That includes $19.3 million originally approved from the FSR, $20.8 million originally approved from the tax levy, and $18 million originally approved from various reserve funds. Among the items to be carried forward are $7.5 million for emergency shelter operations, $5 million for the A1 Sports Facility, nearly $1.3 million for transit safety and security, and about $1.2 million in neighbourhood revitalization grants.
In addition to those recommendations, council will also consider the city's economic update for the fourth quarter of 2022. That report suggests that Edmonton's recovery from COVID-19 is going well, with gross domestic product (GDP) for both the city and the region estimated to have surpassed pre-pandemic levels. Edmonton's GDP is expected to grow 2% in 2023, and an average of 2% per year between 2023 and 2027.
Edmonton's population growth is also showing signs of recovery, with a 2.9% increase from 2021 to 2022, reaching 1,087,803 as of July 1. That's triple the growth from 2020 to 2021 and is the fastest growth rate since 2013 to 2014.
As of Sept. 30, 2022, the city had been projecting a year-end surplus of $67.8 million. The city also recorded surpluses of about $51.9 million in 2021 and $40.2 million in 2020. The last time it posted a deficit was in 2018, when higher fuel costs contributed to a $2.4-million overspend.
City council is expected to approve the 2022 audited financial results on April 25.